Examples of false claims by home health care companies include claims for services to ineligible patients, claims based on falsified patient records or statements of medical condition or eligibility, claims for unreasonable or unnecessary medical tests, procedures or visits, illegal kickbacks to doctors for referrals, failure to obtain required physician approval for services, failure to document services, upcoding, and billing for services of aides with phoney training certificates.
Below are excerpts from press releases issued by the U.S. Department of Justice concerning settlements of major False Claims Act cases involving home health care companies.
October 26, 2001
Florida Home Health Company to Pay U.S. Over $3 Million to Resolve Over Billing Allegations
WASHINGTON, D.C. – Lifeline Health Care of Southwest Florida, Inc. of Fort Myers, Florida and its parent company will pay the United States more than $3,100,000 to settle allegations that Lifeline over billed Medicare and the military health care programs…..
The settlement resolves allegations that from October 1, 1994 through September 30, 1997, Lifeline submitted false or fraudulent claims for Medicare reimbursement for services rendered to patients who did not qualify for home health care and for services that were not medically necessary. The United States further alleged that Lifeline billed Medicare and TRICARE/CHAMPUS for home health visits without the requisite documentation to support the performance and medical necessity of the services billed. …..
July 17, 2002
Tenet Hospital in Florida Pays U.S. $29 Million to Resolve False Claims Act Allegations
WASHINGTON, D.C.- Tenet Healthcare Corporation subsidiary Lifemark Hospitals of Florida has paid the United States $29 million to settle allegations that Lifemark, Tenet and various affiliated and predecessor companies violated the False Claims Act in connection with false claims submitted to the Medicare Program, the Justice Department announced today. …..
The government contended that these submissions included claims that contained or were based on false, fraudulent and misleading statements or omissions regarding the patient’s medical condition, history and/or eligibility for coverage by Medicare. In addition, the United States asserted that the hospital’s submissions included claims for services that were not reimbursable by Medicare because they were not rendered; were provided by unskilled, unlicensed or uncertified personnel; were based upon insufficient, forged or missing documents; and/or were never ordered by a physician. …..
December 17, 2009
Three New York City Home Health Agencies Pay $9.7 Million to the United States to Settle False Claims Act Claims
WASHINGTON – The Department of Justice announced today that the United States and the state of New York have entered into settlement agreements with three home health agencies to resolve allegations that they submitted false claims to the New York Medicaid and Medicare programs.
The New York Medicaid program provides coverage for home health aides only if those aides have valid certificates showing that they received proper training. The United States contended that Nursing Personnel Home Care (Nursing Personnel) knowingly supplied aides with phoney training certificates to Extended Home Care (Extended) and Excellent Home Care (Excellent), which then billed New York Medicaid for the aides’ services; that Extended and Excellent knowingly billed for aides with phoney certificates who were untrained; and that Extended and Excellent knowingly submitted claims to the Medicare program for home health aide services purportedly rendered by aides supplied by Nursing Personnel that were not actually provided. …..
Below is a Special Fraud Alert from the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services concerning false claims by home health care agencies.
Home Health Fraud
The Office of Inspector General was established at the Department of Health and Human Services by Congress in 1976 to identify and eliminate fraud, abuse and waste in Health and Human Services programs and to promote efficiency and economy in departmental operations. The OIG carries out this mission through a nationwide program of audits, investigations and inspections.
To help reduce fraud and abuse in the Medicare and Medicaid programs, the OIG actively investigates schemes to fraudulently obtain money from these programs and, when appropriate, issues Special Fraud Alerts which identify segments of the health care industry that are particularly vulnerable to abuse. This Special Fraud Alert focuses on the home health industry and identifies some of the illegal practices the OIG has uncovered.
What Is Home Health Care And Who Is Eligible To Receive It?
Medicare’s home health benefit allows people with restricted mobility to remain non-institutionalized and receive needed care at home. Home health services and supplies are typically provided by nurses and aides under a physician-certified plan of care.
Medicare will pay for home health services if a beneficiary’s physician certifies that he or she:
is homebound–i.e., confined to the home except for infrequent or short absences or trips for medical care, and
requires one or more of the following qualifying services: physical therapy, speech-language pathology, or intermittent skilled nursing.
If a homebound patient requires a qualifying service, Medicare also covers services of medical social workers and certain personal care such as bathing, feeding, and assistance with medications. However, a beneficiary who needs only this type of personal or custodial care does not qualify for the home health benefit.
Fraud and Abuse in the Home Health Industry
Home care is consuming a rapidly increasing portion of the federal health budget. This year, Medicare payments for home health will reach close to $16 billion, up from $3.3 billion in 1990–nearly a five fold increase. Home health care is particularly vulnerable to fraud and abuse because:
Medicare covers an unlimited number of visits per patient;
Beneficiaries pay no co-payments except on medical equipment;
Patients don’t receive explanations of benefits (EOBs) for bills submitted for home health services; and
There is limited direct medical supervision of home health services provided by non-medical personnel.
The OIG has learned of several types of fraudulent conduct, outlined below, which have or could result in improper Medicare reimbursement for home health services.
False or Fraudulent Claims Relating to the Provision of Home Health Services
The government may prosecute persons who submit or cause false or fraudulent claims for payment to be submitted to the Medicare or Medicaid programs. Examples of false or fraudulent claims include claims for services that were never provided, duplicate claims submitted for the same service, and claims for services to ineligible patients. A claim for a service that a health care provider knows was not medically necessary may also be a fraudulent claim.
Submitting or causing false claims to be submitted to Medicare or Medicaid may subject a person to criminal prosecution, civil penalties including treble damages, and exclusion from participation in the Medicare and Medicaid programs. OIG has uncovered the following types of fraudulent claims related to the provision of home health services.
Claims For Home Health Visits That Were Never Made And For Visits to Ineligible Beneficiaries
OIG has uncovered instances where home health agencies are submitting false claims for home health visits. These include:
Claims for visits not made.
Claims for visits to beneficiaries not homebound.
Claims for visits to beneficiaries not requiring a qualifying service.
Claims for visits not authorized by a physician.
One home health agency billed Medicare for 123 home health visits to a patient who never received a single visit, and submitted claims for beneficiaries who were in an acute care hospital during the period the agency claimed to have provided home visits. Another agency provided a home health aide to a beneficiary so mobile that he volunteered at a local hospital several times a week.
A third agency claimed nearly $26 million during one year in visits that were not made, visits to patients that were not homebound, and visits not authorized by a physician. OIG interviews indicated that beneficiary signatures were forged on visit logs and physician signatures were forged on plans of care. This agency had subcontracted with other entities to provide home health care to its patients, and claimed that the subcontractors falsely documented that visits were made and services were provided.
Medicare permits a home health agency to contract with other organizations, including agencies not certified by Medicare, to provide care to its patients. However, the agency remains liable for all billed services provided by its subcontractors. The use of subcontracted care imposes a duty on home health agencies to monitor the care provided by the subcontractor.
Home health agencies, as well as the physicians who order home health services, are responsible for ensuring the medical necessity of claims submitted to Medicare. A physician who orders unnecessary home health care services may be liable for causing false claims to be submitted by the home health agency, even though the physician does not submit the claim. Furthermore, if agency personnel believe that services ordered by a physician are excessive or otherwise inappropriate, the agency cannot avoid liability for filing improper claims simply because a physician has ordered the services.
Fraud in Annual Cost Report Claims
In addition to submitting claims for specific services, home health agencies submit annual cost reports to Medicare for reimbursement of administrative, overhead and other general costs. For these costs to be allowable, Medicare regulations require that they be (1) reasonable, (2) necessary for the maintenance of the health care entity, and (3) related to patient care. However, the OIG has audited cost reports which include costs for entertainment, travel, lobbying, gifts, and other expenses unrelated to patient care such as luxury automobiles and cruises. One home health agency claimed several million dollars in unallowable costs during one cost reporting year. These included utility and maid service payments for the owner’s condominium, golf pro shop expenses, lease payments on a luxury car for the owner’s son at college, and payment of cable television fees for the owner’s mother.
Medicare also requires home health agencies to disclose in their cost reports the identity of related parties with whom they conduct business, in order to adjust costs that are likely to be inflated by health care providers who self-deal (i.e., purchase goods or services from related companies). A related party issue exists when there is common control or common interest between the provider and the organization with whom it is doing business. OIG has investigated home health agencies which failed to disclose ownership or other relationships with entities with whom they contracted for accounting services, management/consulting services, and medical supplies. These agencies billed Medicare unallowable amounts for marked-up supplies and services.
Paying Or Receiving Kickbacks In Exchange For Medicare or Medicaid Referrals
Kickbacks in exchange for the referral of reimbursable home health services is another type of fraud that OIG has observed. The Medicare program guarantees freedom of choice to its beneficiaries in the selection of health care providers. Because kickbacks violate that principle and also increase the cost of care, they are prohibited under the Medicare and Medicaid programs. Under the anti-kickback statute, it is illegal to knowingly and willfully solicit, receive, offer or pay anything of value to induce, or in return for, referring, recommending or arranging for the furnishing of any item or service payable by Medicare or Medicaid.
OIG is aware of home health providers offering kickbacks to physicians, beneficiaries, hospitals, and rest homes in return for referrals. Kickbacks have taken the following forms:
Payment of a fee to a physician for each plan of care certified by the physician on behalf of the home health agency.
Disguising referral fees as salaries by paying referring physicians for services not rendered, or in excess of fair market value for services rendered.
Offering free services to beneficiaries, including transportation and meals, if they agree to switch home health providers.
Providing hospitals with discharge planners, home care coordinators, or home care liaisons in order to induce referrals.
Providing free services, such as 24 hour nursing coverage, to retirement homes or adult congregate living facilities in return for home health referrals.
Subcontracting with retirement homes or adult congregate living facilities for the provision of home health services, to induce the facility to make referrals to the agency.
Parties that violate the anti-kickback statute may be criminally prosecuted, and also may be subject to exclusion from the Medicare and Medicaid programs.
Marketing Uncovered Or Unneeded Home Care Services to Beneficiaries
OIG has learned of high pressure sales tactics employed by some agencies in the home health community to maximize their patient population and their profits. These agencies target healthy beneficiaries on the street or in their homes and offer non-covered services, such as grocery shopping or housekeeping, in exchange for Medicare identification numbers. Physicians have also reported that some agencies attempt to pressure them to order unnecessary personal care services by informing them that their patients are requesting these services and will find another physician if their demands are not met.
These abusive marketing practices can result in false claims liability on the part of agencies and/or physicians, and may also constitute illegal kickbacks.